When it comes to dealing with debt there are really three options: (1) pay them in full, (2) settle the debt for an amount less than the full amount, or (3) file for bankruptcy.
If you can’t pay your debts in full and the idea of bankruptcy makes your stomach turn, then debt settlement can be a way to deal with your debt problem once and for all.
However, debt settlement is not easy and getting a good settlement can be more an art than an exact science.
With that in mind I wanted to share with you a tactics that I have learned from the sales/marketing world that can help you in your debt settlement negotiations.
Creating a Sense of Urgency
In the world of sales and marketing they want to create an environment where you feel some urgency to buy the product or service that is being peddled. This is why you see sales that are for a “limited time” or products that are available for “the next 24 hours and then they are gone forever.”
The idea is if a salesman can make you feel like you only have one shot to get the product or service you are looking for then you will be much more likely to make a purchase and make it sooner rather than later. Not only that, but you may be willing to pay more than you normally would because you are worried that you might miss out if you don’t take immediate action.
You can use this same tactic with your creditors as you approach them to settle your debts. Help your creditors to see that they have a limited opportunity to take your money (settlement) and if they don’t do it now then this opportunity will be gone forever and they will get zero dollars.
You may think this sounds ridiculous, but think about your own experiences when it comes to this sales tactic being used on you. It may be that you are completely aware that the product or service will be offered at a later time or for a cheaper price, but there is something in the back of your mind that is saying “what if I am wrong, and the opportunity to buy this is limited, and if I don’t do it now I will miss out on the opportunity”. Marketers know that even when we understand the tactic, we are still tempted to move forward with the purchase because we are afraid that we might be wrong and miss out.
Here are a few examples to give you some ideas on approaches that you can use for your creditors:
“My income is limited however I have a family member who is willing to help me with settling this debt. My family has given me a limited time frame to get this done. I can offer to pay $$$$$. This settlement must be complete by [enter date] or I will not be able to secure the funds necessary to settle the debt from my family. Let me know by [insert date] if you agree to this settlement. If I do not hear from you by [insert date] then this offer is revoked and will not be offered again.”
“I would really like to resolve this account, however I am dealing with numerous creditors and cannot afford to pay everyone. I am offering your company $$$$ payable no later than [insert date]. As I have other creditors I need to deal with I need to know if you will accept this offer no later than [insert date]. If I don’t hear from you by this date I will assume you do not wish to accept this offer and will offer the limited funds I do have to one of my other creditors.”
“The current judgment and wage garnishment you have against me is causing severe financial hardship on me and my family. Because of this it is going to be necessary to for me to take drastic steps to protect the financial well being of my family. I am currently considering filing for bankruptcy but wanted to make one last offer to your company to settle this account for $$$$. I will need to know no later than [insert date]. If I do not hear from you by that date the offer is withdrawn and I will proceed with the bankruptcy process.”
I offer these examples to show you how this tactic can work in the debt settlement world. You should of course be truthful in the scenarios you present to your creditors, but you get the idea as to how you can create a sense of urgency that your creditors may want to take advantage of as soon as possible.
You Have More Leverage than You Think
People who are in debt and being hounded by debt collectors often approach their creditors with an attitude that their creditors hold all the power and they must simply agree to what ever is offered.
However, if you think about it, your creditors want one thing and one thing alone from you – money. Right now they are not getting any money from you, and even if they sue you and get a judgment the judgment isn’t worth a thing unless they can use to actually get money out of your pocket.
You have something that they want. It is difficult to get money from people. Debt collectors know this and this is why they are always getting themselves in trouble under the FDCPA by threatening and saying things that aren’t true or are downright illegal to get you to give them money.
If you have the funds to settle with a creditor you have a position of strength to negotiate from because you have something they want. Use that to your advantage as part of your negotiation strategy.
If you need help with settling your debts we here at the Arizona Consumer Law Group offer a free consultation where we can go over your situation and give you options on how to finally deal with your debt problems once and for all. We can be reached at (480) 420-4028.